Teach me about credit cards

[paradise lost]

Oh I have at least $50 to $100 left over each fortnight after paying all of the bills. DF can have the same, less or more, depending on whether he gets extra work and whether a big bill arrives. With the other bills, we are on time, and have no current debt at all.

What I am thinking, is if we pay all of the bigger bills on the credit card (electricity, water and phone), and can also can get the odd larger purchase, and pay all the regular bills from our bank accounts. So the rent, internet, health fund, pay TV (for the next few months then contract ends) are the same value each regular time to pay. Whereas the phone, electricity, water fluctuate and don't come on the same date each time. These are the bills we're not really able to predict. I'd pay with these with the credit card and as soon as we both get paid, we pay it right back.

Sometimes we have to pay a bill or make a purchase in between paydays.

I'll talk to FIL about it too, perhaps with the few bigger purchases he could buy, and I will set up a payment plan with my internet banking and pay him back asap.

I don't understand why the bills would come at different times? All companies have some patterns to their billing. They might bill after 4 weeks or every 90 days, rather than on the 3rd of each month or the 3rd of every third month, for example, or they might have a set credit limit, such as never letting you owe more than $100 in any billing period, but there WILL be a predictability to their nature, because they have to have a system to operate - an arbitrary or random billing period would be totally chaotic and make their internal financial systems a nightmare.

It is always hard to set up a budget system as i described because say you are saving for the electricity bill, you have to find the money to pay the current bill AS WELL as saving for the one after. However once you're saving ahead of time you never get caught out again, and if you put it on a credit card you haven't ACTUALLY paid it, you've just put it off.

You can predict your electricity bill amount by reading your meter every day, week or month (depending on how stable your use is) and using the info off the last bill (it will tell you how to turn the units on the bill into kiloWatt hours and how much those hours cost you in real terms, and how much VAT or other tax you might have to pay) work out the cost of the next bill. You can also use your readings to reduce your useage (and see how much it's reduced). Same with water if it's metered. With the phone we just keep track of our calls in the sense that we have free evening and weekend calls for the first hour, so we limit calls as much as possible to free times, time ourselves and after an hour hang up and redial.

Either way it is only going to cost MORE to pay bills with a credit card because you aren't actually paying them, you're just swapping the person you owe and not in a good way.

We save 170GBP/month for gas and electricity. In the winter the bill usually costs every penny of that, in the summer nothing like it - in the summer we have extra cash to spend or save. I would suggest you work out the maximum each bill will cost and save that much and treat anything you don't spend as a bonus. I used to always save 30GBP/month for my phone and it was NEVER more than 60GBP/quarter but it was very handy having the extra cash the day after i'd paid the bill every quarter, like a great prize for being sensible

If FIL has money you would be far better to borrow from him and work out a re-payment system and set up a standing order to do so than get a CC to do it. FIL will not charge you compound interest!

Bx

[Phteven]

You can come to all sorts of agreements with the utilities people. Some of them will arrange small payments from your DSS payment so that you aren't hit with a big bill. I've seen other members here talking about schemes where they pay them a set amount weekly or fortnightly so that when bill time comes they just get a tiny bill or even a credit to the next bill.

ETA - like this one http://www.originenergy.com.au/2391/...u-to-pay-bills

[echidna]

Well the phone is monthly, but I don't know the exact date it will come out of direct debit, it could come on a low wage week or right after we pay bills. Same for the electricity and water, which are quarterly. We are waiting for the water bill, we don't even know when that is, we haven't gotten one since we moved in in November. With the electricity bill, we have peak, shoulder and off peak periods, all with different cost rates. So I can only work it out by the maximum, but its all so confusing.

Can you prepay a credit card? Like pay money to it when you aren't owing anything?

[paradise lost]

Well the phone is monthly, but I don't know the exact date it will come out of direct debit, it could come on a low wage week or right after we pay bills. Same for the electricity and water, which are quarterly. We are waiting for the water bill, we don't even know when that is, we haven't gotten one since we moved in in November. With the electricity bill, we have peak, shoulder and off peak periods, all with different cost rates. So I can only work it out by the maximum, but its all so confusing.

You will be able to work out the rates hun or else how could THEY work them out to bill you? I had economy 7 in my old place which means 7 hours at night have a different rate. Here the first 670 kWh of each quarter are 7.5pence each and all the rest are 3.5pence each. It IS confusing but it is totally doable and once you're on top of it you'll feel much better and more in control.

Can you prepay a credit card? Like pay money to it when you aren't owing anything?

You can yes, but they won't pay you ANY interest - you'd be far better putting the money into a savings account where it can accrue interest and having the direct debits going out of that.

Bx

[echidna]

Well I do know the electricity bill is coming sometime in March. I'll get DF to get the receipts/emails from the last bills, so I can add it to the calendar on the fridge where I work out the finances. I guess I got a bit slack in the last couple of weeks, probably since I went to the doctor and went on antidepressants. I'll get back into keeping track of things, but DF really needs to save or give me money and I can save.

WRT prepaying on a CC, it would be when I don't quite have enough money before the bill is due, and the owing part would be on the CC. Say the electricity is $300, and I have $170, we put $170 on the CC and pay the bill with the CC, of a $1000 limit we'd only be owing $130 plus interest.

I think I'll leave the credit card until later, and just preplan all the finances. DF thinks I stress about money too much. For good reason! He doesn't worry at all! And I keep telling him and trying to get him to know what is happening with our money.

[paradise lost]

Well I do know the electricity bill is coming sometime in March. I'll get DF to get the receipts/emails from the last bills, so I can add it to the calendar on the fridge where I work out the finances. I guess I got a bit slack in the last couple of weeks, probably since I went to the doctor and went on antidepressants. I'll get back into keeping track of things, but DF really needs to save or give me money and I can save.

WRT prepaying on a CC, it would be when I don't quite have enough money before the bill is due, and the owing part would be on the CC. Say the electricity is $300, and I have $170, we put $170 on the CC and pay the bill with the CC, of a $1000 limit we'd only be owing $130 plus interest.

I think I'll leave the credit card until later, and just preplan all the finances. DF thinks I stress about money too much. For good reason! He doesn't worry at all! And I keep telling him and trying to get him to know what is happening with our money.

As Dach said above, almost ALL companies will enter a re-payment or pre-payment agreement with those who are living on restricted means. It would be better to pay the electricity $170 and then agree with them the schedule on paying the further $130 because they WON'T charge you interest for that. You could even arrange to pay the set repayment amount EVERY week as Dach suggested, so that when the bill next comes it is already half or mainly paid.

As a general rule you NEVER accumulate debt to pay debts unless you are forced to. And when i say forced to i mean you will be homeless unless you pay a whack of rent right NOW. Utility companies only charge penalties when you don't tell them what you're doing (i.e. when you neither pay the bill nor tell them when and how you plan to). Overall it will be far cheaper to pay the electricity company what you owe than risk oweing it longer and accumulating more debt on a CC.

I'm sorry about the depression. I had depression for several years about a decade ago and i found that the 2 problems of 1) feeling so overwhelmed by simple or not-so-simple tasks that i ended up avoiding or ignoring them, and 2) feeling utterly out of control with everything, fed into one another so the more overwhelmed i felt the less i did and the less i did the more overwhelmed i felt. I think that whatever your DF thinks you are both wise and mature to be really thinking about your money situation. The difference between struggling and managing is just what you DO with your money. I have friends who don't manage their money and no matter how much they have it's not enough - they just manage it badly and never QUITE get on top of the things they need to pay.

Bx

[Malyna]

I wouldn't get a credit card - they only mess up the budget and get you into more debt.

Most electricity providers allow you to make a fortnightly payment, so if your electricity bill is $300 a quarter, just divide it by the number of pays you get over a quarter ($50 a fortnight) - then you don't need to worry about paying those bills. I think you need to need to get a float up in the account to cover the full amount of the bill (depending when you start).Telstra used to do it, but I think you have to ask them about it.

Everytime I've got a credit card and bought things I thought I needed, its just turned out to be a nightmare trying to find the extra money to repay the debt. I would save money every time - although like folks have said if it is an emergency, they are handy in that respect.

The only way to be a saver is to save money and go without until you can afford it. It is surprising how little you 'really need' when you have to save up for it.

Some credit unions do christmas club accounts, where you can put in x amount a fortnight for a year (which might help you budget for your wedding). Of course you can access the money early, but it can help you save.

My experience with reward cards is that they are crap! You need to spend up big to get any 'rewards' and by the time you have done that, with the interest you could have just gone out to the shops and bought exactly what you wanted (rather than just got what brand the credit company had done a deal with).

Go for a no frills card if you need to, with the lowest annual cost, and then put it in a HUGE block of ice in the freezer and don't go near it! Why give some large company your hard earned cash, in the form of interest! Put it in your pocket!!